New! Aid for trade

In this section, you may find new materials that have been published on the topic of ‘Aid for Trade‘, since the date of the event. We continually select major new publications and articles that add up to the policy points discussed in our previous briefing.

Have Aid for Trade programmes helped African economies achieve structural change? This article finds that change has occurred in patterns of exports though it cannot credibly attributed to Aid for Trade, nor are there signs that AfT has helped switch employment from agriculture to industry. The volume of Aid for Trade has increased more than tenfold in the past twenty years with the objective of accelerating economic development in developing countries. Structural change is a necessary part, if not the core mechanism, of development. Hence we ask: ‘Has Aid for Trade (AfT) helped African economies achieve structural transformation?’ Our conclusion is ‘unfortunately, not as far as we can see.’

Case studies conducted on the ground in eight developing countries suggest that Aid for Trade is effective when the right conditions prevail. However, these conditions are often absent. The Aid for Trade initiative should refocus on building the institutional mechanisms that are critical to the effective delivery of aid. A number of developments have made evaluation more urgent than ever before. First, donors are facing a tight budget situation at home, forcing them to reassess their external aid policy. OECD (Organisation for Economic Co-operation and Development) data shows that, while Aid-for-Trade (AfT) flows at constant 2012 prices have increased over the years, the gap between commitment and disbursement has grown wider after the financial crisis in 2008. Second, the landscape for aid has changed dramatically with the rise of emerging economies, whose AfT activities, while significant, remain largely outside of the OECD Development Assistance Committee (DAC) framework. Finally, the demand for greater transparency and accountability in developing countries has increased with the return of democracy in many countries and aided by rapid and efficient information exchange.

This article reviews some of the advantages of regional approaches towards reducing trade costs and achieving sustainable development objectives. In view of some of the tensions outlined, it argues that certain knowledge gaps should be addressed in view of inclusive sustainable development objectives. Regional approaches have become the preferred mechanisms of disbursing aid for trade (AfT) for some of the major donors. Regional AfT strategies, created by regional economic integration units and supported by AfT disbursement agencies, invariably include the reduction of trade costs as an objective. After all, investing in trade capacity building and trade facilitation helps in reducing the costs of trading for business. After briefly outlining some of the main advantages of leveraging regional AfT strategies to reduce trade costs, this article draws attention to some important knowledge gaps in view of the achievement of inclusive sustainable development objectives.

Agriculture is easily the most important economic sector for the Pacific island countries – providing the greatest source of livelihoods, cash-employment and food security for more than eight million people across the region. Typically, food production dominates the sector – with ‘village-level’ farmers growing and distributing a large quantity and varied range of fresh vegetables, root crops, nuts, fruits and flowers. Because many of these farmers focus on growing food for their own families, or to share with others through socially-embedded systems of exchange, traditional food production is often under-represented in national accounts and has been identified as a ‘hidden strength’ of Pacific economies. [Click here to read the paper]

The just concluded negotiations on the Economic Partnership Agreements (EPAs) between East Africa Community (EAC) member states and the European Union (EU) markets have once again failed to strike a deal.

In the Government Gazette of 21 January 2014 the South African Department of Agriculture, Forestry and Fisheries (DAFF) published the latest information regarding the procedures, administration and allocation of export permits for specific agricultural exports under the Trade, Development and Co-operation Agreement (TDCA) between the European Union and South Africa. The TDCA came into force on 1 January 2000 and establishes a Free Trade Area between the EU and South Africa. In accordance with Article 14 and Annex IV of the TDCA the EU grants tariff preferences on limited quantities of selected agricultural products, exported from South Africa, in the form of tariff-rate quotas (TRQs). The products the TRQs apply to currently include cut flowers (including fresh roses, chrysanthemums, and lilies under HS 0603), fruits and nuts (including strawberries, pears, apricots, peaches and fruit mixtures under HS 0811 and HS 2008), fruit juice (including orange, pineapple and apple juice under HS 2009) and wines under HS 2204. TRQs are a two-tiered tariff system with a limited volume of imports (quota) imported at a lower tariff rate (in-quota tariff), while all additional imports are subject to a higher import tariff (out-quota tariff). This means that import quantities under a TRQ system are not limited, but that the over-quota import quantities are imported at a higher rate of import duty.

The purpose of this study is to help guide the thinking of Australian organizations involved in official development assistance (ODA) on the future of Aid for Trade (A4T) in the area of agricultural development, and especially the advancement of food security and nutrition in Asia-Pacific region’s poorest countries. In particular, the study (1) reviews funding patterns in A4T; (2) summarizes donor approaches to A4T in agriculture, where possible provides insights into individual donors; (3) reviews academic and donor literature on the effectiveness of A4T as a means to increase trade, economic growth, and agricultural development; and (4) takes note of the lessons learned by donors with respect to A4T generally and as they relate to agriculture specifically. [Click here to read the document]

To date, little emphasis has been placed upon examining future trading relationships within the BRICS (Brazil, Russia, India, China and South Africa) countries. In general, economic theory suggests that the gains from trade are greater when a wider suite of countries is involved, and this is the fundamental basis of the multilateral liberalisation objectives of the World Trade Organisation (WTO). With the WTO currently stalled in its trade reform objectives, the question is raised as to whether or not trade liberalisation within BRICS may be an objective worth pursuing as this bloc represents a significant portion of the so-called ‘South-South’ trade. This paper explores the trade and economic implications of a Preferential Trade Arrangement (PTA) between the member countries of BRICS. The starting point is that except for the importance of China as an import source intra-BRICS trade is, in general, not very high: this so because the EU is commonly the main import source and export destination.

Two EU Commissioners participated to the Fourth Global Review of Aid for Trade in Geneva yesterday (8 July). The event was aimed at providing an opportunity to donors and to developing countries to look how Aid for Trade (AfT) is helping people across the world to trade and what has been achieved so far.

Although global value chains (GVCs) have existed for decades now, interest in the literature has reignited in recent years, particularly since the global financial crisis. Policy makers have sought to better understand the dynamics and governance of GVCs as well as the opportunities and constraints that this type of trade poses for firms in the various stages of participation.

The Economic Commission for Africa (ECA) and the WTO, on 8 July 2013, signed a Memorandum of Understanding to enhance trade-related technical assistance and capacity-building for African countries. Director-General Pascal Lamy said “building capacity to trade is a ‘must’ step for Africa to more effectively participate in the global economy.”

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